Vaultbank Brings the Best of Crypto and Traditional Finance Together
CryptoMania chatted with two team members of Vaultbank: one of the most promising ICOs of 2018 that looks to bring old-school finance together with cryptocurrency’s groundbreaking technology. Christopher Cummock and Eric Clarke spoke to us about convincing some of the finance world’s most influential business people to hop on board and creating a product that makes sense for both merchants and consumers.
Christopher Cummock and Eric Clarke walked into the Hyatt Union Square Hotel, fueled by New York City’s vibrant energy. They had just come from a series of promising meetings. The previous day, they had signed famed venture capitalist David Drake to their board of directors, met with Third Point Capital, and later went to Mike Novogratz’s famous happy hours to chat with the best and brightest in finance. VaultBank was having a killer week, and Cummock and Clarke were exhibiting the classic confident, entrepreneurial glow. Their project, VaultBank, is betting big on the longer-term role that cryptocurrency and blockchain technology will play in people’s lives. Based out of their founder’s apartment in San Francisco, Vaultbank is a global investment firm that’s dedicated to funding promising crypto projects, which benefit the entire ecosystem. On the Vaultbank Exchange, the firm will be investing in tokens that have lower transaction times and fees, which will help exchanges run at a much more efficient pace; an issue that’s been hindering both companies from expanding, as well as preventing new traders from entering the market. Vaultbank’s VB token is a security cryptocurrency that’s backed by credit-assets, which provide quarterly dividends to their owners and a debit MasterCard. This card can be linked to Ethereum and Bitcoin and can be used wherever MasterCard is accepted. The best part about the debit card? The merchants don’t see that the cardholder is paying with crypto, so there’s no psychological barrier between cryptocurrency and payment. The quarterly dividends are paid based on the success of Vaultbank’s portfolio and given out only to accredited investors – even when purchased on a secondary market like a crypto exchange.
Cummock, Vaultbank.io’s Managing Director and co-founder, and Clarke, the Marketing Manager, were introduced to the crypto world through very different paths. Clarke previously worked in the clothing business, while Cummock received an MBA and MS of Finance from Florida International University. Cummock worked for a hedge fund in Miami for four years, later moving on to tech investing and eventually finding his way to the Bay Area where he met his future Vaultbank partner, Austin Trombley. Trombley brings a decade of consulting experience to the table, and also co-founded a successful Quantitative Credit Hedge Fund that’s partnering with Vaultbalk, Random Forest Capital. The Vaultbank team has an incredible support system behind them including Ken Kroner, the Ex-CIO of BlackRock, Aaron Oliver, the Former Head of Digital Commerce MEA at Mastercard, and Mike Gay, the Former Manager Director at Bank of America; the list goes on like an all-star team roster. Garnering a mix of backgrounds while bringing an influential group of entrepreneurial veterans was an essential move in their business development, as they wanted to make sure that they not only had the trust of the financial world behind them but more importantly, the confidence of the consumer. “We really want to build a long-time financial service institution, not just be a hyped up ICO, 95% of which are frauds,” Clarke explained. Cummock and Trombley saw an incredible opportunity to bring their tech and finance backgrounds to the adolescent cryptocurrency market, and they had a lot of work cut out for them.
One of the most significant hurdles Vaultbank experienced was their adherence to fiduciary regulation. Bringing their project to lawyers proved…lengthy. After interviewing three or four law firms, going through with the legal compliance was an uphill battle. Since Vaultbank uses smart contracts that are built into the VB tokens, users agree to resale restrictions, legal paperwork, and more – all by simply purchasing the coin. Since each coin represents non-voting equity in Vaultbank, VB owners receive dividends, and the Vaultbank team had to figure out how to pay token holders without mailing them a physical check. The challenge left their lawyers practically stunned. “They thought we were crazy,” Cummock said, “they thought we could never do it, and we worked with the order book to build the requirements and put all this stuff on the smart contracts.” Recent developments in the legal landscape show that Trombley and Cummock may have been right in their tenacious dedication to legal compliance. Several token sales and ICOs have now been targeted by the Security and Exchange Commission, with projects such as BitConnect, and Munchee Inc. both receiving cease and desist orders. Vaultbank’s over compliance and the current legal route doesn’t seem so overly cautious anymore.
The tokens are Regulation D compliant and are using the Ethereum blockchain for its smart contract feature. Though Ethereum’s been dealing with some network congestion issues in the past year (we’re looking at you, CryptoKitties), Cummock and Clarke were nonetheless enthusiastic about supporting the ETH blockchain; especially when looking at the issue through a more holistic lens. When Vaultbank launched two years ago, the cryptocurrency and blockchain scene looked remarkably different – over the past year, ICO-mania has come and gone, with the United States’ regulations continuing to be a point of contention within the crypto community. “When we started this venture, we thought, ‘Crypto is insane. There are so many people making money and not paying taxes. The party’s going to be over soon,’” Cummock said. And as the SEC has been cracking down on projects recently for presenting themselves as scams or securities, it’s reaffirmed Vaultbank’s financial and structural solidity. Cummock and Clarke feel confident that their product is a beautiful intersection of finance, investing, and digital assets that have a more stable twist than other cryptocurrencies such as Bitcoin, which can dip or rise drastically within minutes. “We feel like we’re going to be a more secure token with the dividends and really professional, well-seasoned management team. They’ve written all of our legal documents, really transparent.” Their advice for crypto newbies? “Do your homework, beware of the SEC, and make sure you have some kind of support team behind you.” Further, “consult with a lawyer, accountants, financial advisor. There are good projects out there.” Vaultbank is undoubtedly one of them, and they’ve got a support system to prove it. Vaultbank’s public presale starts on January 17th.
Quotes may have been edited for length or clarity.